brought to you live from london, singapore, and around the world, this is "worldwide exchange." welcome to the program. the headlines today from around the globe, greece gets a deal but investors appear under whelmed by a deal. private investors agree to take a deeper haircut. athens proposes legislation poursing bondholders that are not going to take part in the debt swap to take losses. >> india's latest cpi data suggests the third largest economy could be moderating. and in the u.s. investors will be ringing up results from a

pair of rae tail heavyweights today kicking off a big week of earnings for the sector. hello. a very good morning to you. welcome to "worldwide exchange." talks have produced a long-awaited agreement on a second bailout package for greece. finance ministers finally reached a deal. the ideal is private creditors will take a nominal haircut of 5 53%. originally it was 50% which implies a loss of more than 70% on actual holdings when you put in the extend ed maturities. the haircut is to help lower debt by 2020. the questions still remain over whether greece is truly out of the woods. silvia, who has been pulling all the hours in the very long day and overnight as well today, we have a deal on the table. this is a great er psi

involvement. there is the idea of central bank involvement. no, as i understand it, silvia, no escrow account. that idea disappeared, did it? >> reporter: no, it hasn't disappeared. and one can safely say there is no animal safe, no goose out of the woods, no cow off the ice as we say in germany. i think what we're still doing is what we've done all this time, buying time. we push it a little bit further into deep space. greece was on the verge of disorderly default. we've pushed it back into orderly boundaries now. the escrow account, they call it a special account or specially dedicated account, is not off the table. it is there. the conditions of whatever is attached to it have to be fine-tuned yet the but it has been agreed upon. we have, of course, an involvement in the central banks, not a haircut from the ecb. we know that profits from the

bonds are just being passed on via the national central banks, another $1.8 billion are coming from that and we have this slightly modified psi deal on the table where jean-claude juncker and everyone else that was negotiating for a record breaking 14 hours, i think, because the press conference was only in the early hours of the morning. confident that the voluntary participation will be on track but in order to back it up, the greeks are going to put a collective action clause on track as well within the next two months, i.e., before the next two elections. mario draghi, head of the ecb, could be fairly happy with himself when he left this meeting in the early hours of the day. here is what he had to say. >> it's a very good agreement, and we certainly welcome first and foremost the commitment of the greek government to undertake the actions to restore

growth and stability. we also welcome the commitment of the wror oeuro member countr help greece to come back on the path of growth and job creation. >> reporter: so i think what we can say he delivered what was necessary. anything else, no deal after last night's meeting would have really sent the market sort of on a roller coaster that hasn't happened. we have a slightly light reaction to it. there's been this leaked report from the troika out which places worst case scenarios,s worst case scenarios, paints a much darker picture if the reform process isn't pushed ahead and if the economy doesn't pick up again. of course we could be looking down the barrel of an ugly 125% debt to gdp ratio but closer to 270% and all the problems

attached to it. but at the moment we have a bit of a breather, and i think that's the way of the markets as well. >> a breather, i guess, and you tuchld on it there, silvia, a breather for how long? we obviously have is to work our way now to see how much of this psi agreement is taken up and whether the collective action clause needs to be finish kuwaited. what's your view if they do have to initiate it on what the implications would mean for the ecb and others and whether we would trigger an event or not? any comments on that? >> well, there is always a sort of little bit of whistling past the graveyard or whatever the picture is. everybody is insisting that the deal, the psi deal, will happen. that there's enough uptake, voluntary uptake on it, and laes no need for putting the collective action clause into action but, of course,'s something that is being waved in the background. what happens if it has to be called upon is, as we know,

anybody's guess. the default trigger, et cetera, in any case it puts greece more down the road of an orderly default than the disorderly default that we were fearing and shrinking away from before that so i think we're getting a little bit more organized here, even for the eventuality of a default even though everybody insists this is not our likely case scenario. this is certainly is not what we expect, but we have to prep for the worst and we do think that the psi deal will go through. i daresay after 14 hours of negotiations and the sticking point seems to have been, indeed, the fine-tuning on the haircuts and the psi deal, i think they probably have a fair -- fairly judged, arguable optimism that the uptake will be good enough. we have almost parallel to, as we speak, the press conference going on. maybe we get a clearer idea what the official line from the banker's side is but, at the

moment, there is the hope and, indeed, the expectations that the deal will go through. >> silvia, hi, this is christine here in asia. if the psi deal, let's just say, runs into problems, is the ecb willing to step in? is that something you are hearing along the sidelines as well? >> reporter: no, of course the official line of the ecb is they are not going to take any haircuts, that they're not going to be part of any psi deal, probably the sector involvement deal but, of course, that is some door that could still be 0 open to the back side and we don't know how adamant the ecb is in actually taking that kind of hit, and we're not only talk ing with about the ecb, we're talking about the rest of the public sector, of course. at the moment that is not something that's on the table but that could be a little bit of powder they're keeping dry for the emergency. >> all right, silvia. great stuff. thank you very much for holding the fort there for us.

silvia wadhwa. here in asia this is how the reaction has been to the greek bailout deal. a bit mixed. people are saying the deal was priced into the markets already. now investors are staying cautious because it only raised concerns this is only going to be a short-term fix. we'll have to wait and see for more details. the nikkei 225 coming to a little bit of profit taking as it hit the key 9,500 level. the topix is off. 0 0.8% today. we had the financial stocks leading the way higher. the same picture in hang seng, up 0.3%. the oil majors were weaker, though, on concerns the high oil prices will eat into their earnings. elsewhere taiwan weighted index n taiex weighted market. giving metal prices a lift so that's helping the resources sector up and the sensex over in india, we are watching wpi data

moderating. of course giving more maybe for the rbi to ease policy further. sensex trading to the upside 1%. ross, what does your heat map say? stocks are down but we've rallied off session lows. we hit seven month heys last night. we're weight ed to the down sid. decliners outpacing advancers here by around about 2-1. we've come off lows, as i say, this follows further gains yesterday for european stocks. the ftse 100 up this year. right now down one point. flat for the xetra dax but we hit yesterday up nearly 18% for the year. the cac is up. the ftse mib up a quarter of a percent. stocks just rallying from the first half losses. we did see euro as well just below the 1.30 level. now the committee which has represented, of course, all the

private creditors in geshgss last night is currently holding a press conference. the chairman of the so-called pcic, charles dallara, speaking right now. we'll keep our eyes on what they say. what's going to be key, of course, is exactly how much of that offer is now taken up. negotiations should basically come up with an idea between march 8th and march 11th. if there isn't is a significant enough take-up then greece is planning to launch this collective action clause that could force bondholders to take losses. if that happens, are we then constituting a credit event? let's listen in briefly to what he has to say. >> what we are doing here is extraordinary. you will have seen some of the facts already and my colleague and i can elaborate on this if you'd like but this is an unprecedented level, a voluntary debt reduction, upwards of 100

billion euro. we are stretching out maturities so that the cumulative impact of both the debt reduction and the new terms and conditions is such to remove from the next eight years over 150 billion euro of maturities coming due. we've extended these new terms after it debt reduction on highly concessional interest rates. all of this is in recognition of the fact that greece is experiencing ex tornatraordinai challenging times. we have spent many days and weeks there and months, almost, it seems like, in the recent past and i think we have a firsthand sense of the strains that exist in the greek economy and the greek society and the greek system in general. by agreeing to these terms and conditions and if investors decide to follow through on

them, excuse me? that you had gnawed the microphone. [ inaudible ] i'm sorry. i'll try to speak loudly. by agreeing to these terms and conditions and if they are embraced by individual investment firms around europe and around the world, greece will have been given a tremendous breathing space to implement the economic reforms that it has courageously set forth. the arrangements that we've agreed, of course, on the voluntary basis with the greek authorities are an integral part of a broader set of understanding which you would have seen announced last night by the euro group and by the greek authorities. the euro group is extending considerable additional assistance as you will have seen

with the support of the imf and all parties we are pleased to see have found a way including the ecb and national central banks to contribute to the solution. the result can be a tremendous opportunity for greece to implement these reforms. new capital injected into the banking system, new credit flowing into the greek economy, reforms unleashing higher levels of competitiveness and hopefully in a future less distanced than many have forecast, renewed growth in job creation. from our point of view this opportunity in spite of the difficult circumstances and the huge loss, the value being experienced by investors, also holds a number of positive

dimensions. first, i would say that we greatly appreciate the willingness of eurozone authorities to provide 30 billion euro in commitments which will be used by the greek authorities to pay cash for 15% of the current claims held by any investor. this is a significant contribution by the eurozone authorities. secondly, we are very pleased that the understanding reached involved in the new bonds english courts and, importantly, a co-financing structure which provides us some meaningful degree of protection. our counsel, one of whom is sitting beside me here, can explain more adeptly than i can the actual dimensions of that

structure. but let me just say that from 0 our point of view it's an important one. >> this is dallara running threw the comments surrounding the proposal, as he says. they're now going to put to private sector creditors. it's up to them whether they, indeed, take the terms. just to remind you the private sector involvement has been boosted from 50% to 53.5% and they've extended the maturities. and he told them, he said, we're taking a hit as well on the interest rates that we're receiving. the director of hanging research, thank you very much, indeed, for joining us. how much skepticism do you have that there will be a private sector -- a big enough private sector agreement without the greeks having to use this collective action law they are pr proposing?

>> i think in the end that's what's going to happen, that people will have this crammed down their throats by greece because of the collective action clauses in exchange as charles dallara was saying for uk law. i think the bigger question here really is whether this deal is the end of the story at least for a reasonable period of time for greece. and the answer to that, i think, has to be no. it'll take some of the pressure off the debt payments but the economic situation in greece will continue to be just terrible and the politics around that will it continue to dog greece and the eurozone and the relationship there. >> in a sense, how much time have we bought? the contraction increased last quarter down 7%. unemployment is over 20%. it's expanding fast. we haven't even started to implement this next set of austerity cuts, a plan and we have elections coming up in which we have no idea. and this is the point the germans, the dutch, the austrians have made that they are deeply skeptical of that

implementation. >> i think they're right to be deeply skeptical. unfortunately, the kind of extraction of the pound of flesh that's being required for domestic reasons in the countries to get this who money lent to greece and to have this debt forgiveness deal done only aggravates the economic and political situation in greece so ultimately the same story is still there, i think. the short term pressure in a matter of months, maybe a matter of quarters, but we'll be looking at this problem again. at most it's a matter of a few years, right, because we're talking about in a decade's time the debt going to perhaps 130% of g d p and a leaked report. >> worst case scenario 160%. >> coming full circumstance to where we are today essentially, right. really accomplish very little in terms of actual debt reduction d relief.

>> we keep talking about bailout. we keep talking about debt. we had, of course, heard there was going to be reforms unleashing, as he put it, competitiveness. is there anything you are hearing about growth generating policies that would help greece recover by itself? >> i think the structure reforms conceptually are a good idea and absolutely necessary and in the long run they will pay off. however, that long run could be very long indeed. it took germany, the most competitive major economy in the eurozone, 15 years of competitiveness boosting structural economic reforms and keeping wages growing below productivity to stop being the sick is man of europe and to become the dominant economic force that it is today. so that's germany. how long is it going to take greece? well, what's going to have to happen in greece tore the structural reforms to work is that the prays and wage level

has to be deflated. that will come down. so the debt burden is going to go back up relative to gdp. that's why we're not gaining that much if anything in terms of debt to g ddp ratio. there are going to be fiscal pressures and political fre pressures that are going to continue. so this is perhaps a necessary step but it is far from the final answer it to the problem in greece. >> okay 0. good to have you on. plenty more to come from you over the next hour. still to come on today's program, india's retail price inflation rate hits 7.5% in january. does the central bank have room to ease?

welcome back to wo"worldwid exchang exchange". india has unveiled its new cpi index 7.65% for january. that number is a touch higher than the standard wholesale inflation for the period but still pointed to possibly moderating price pressures. analysts say the data gives the

rbi more scope to ease monetary policy. let's talk more about it with our next guest, the chief economist for hsbc. good to have you with us. overall price pressure seems to be moderating. does this give the rbi more room to ease policy, do you think? >> we do expect it to ease in the second quarter of this year. we have to recognize that pressures are only coming off gradually. the decline we've seen in headline inflation is because of food prices coming down after they were very, very high in 2011. a base effect lingering here. i think the underlying pressures, food prices are still holding up well above the comfort zone. so they can can only start to ease gradually. we have to wait until the second quarter. >> for a long time india has used wpi as an inflation guide now more. which will we look at closely? >> wpi. the reason is simple that it has

a long track record. going ahead the cpi is important for a number of reasons. number one it ropes a broader sector, reflects inflation which is in effect. second isly at the consumer level. essentially better demand pressures and what monetary policy needs to do is control demand. so an important gauge over time when it has more of a track record to get a better sense but not for now. they will have to start to look at it more closely. >> even if the rbi does cut, as you suggest, in the second half of the year, we have the risk of escalating oil prices. will that diminish any impact from easing policy? >> first of all, it's the second quarter that we begin to it to cut. yeah, oil prices throw a little bit into the mix here now. if they stay elevated, if they stand to go up, it could have implications in india in particular. that is something is they will have to take a close eye on. that could impact the timing and

cut rates. clearly that's something we are watching very closely. at a time everybody is looking at china and domestic consumption, people are wondering in india, what's the trend like given all these external head winds you are seeing? >> a cyclical slowdown in consumption in india because of the lack of monetary tightening and people are more cautious about spending. there still is a strong underlying growth in india. it is facing head winds. >> thank you very much for your insight. good talking to you. the chief economist for hsbc. ross? >> we'll take a short break. still to come, we'll get updates from brussels, eurozone finance min minister reaches a deal. speaking at the end of a marathon session of talks that lasted well into the early hours, the euro group president jean-claude juncker summed up

the mood. 9. >> i strongly hope that you are too tired to ask questions. if not, please ask them. to give you the answers you are waiting for. i'm exhausted. 

this is cnbc's "worldwide exchange." headlines from around the globe, greece gets a deal but investors seem underwhelmed. the head of the iff which led negotiations on behalf of private creditors says the deal is fair for all parties and will help greece get back on its feet. >> greece will have been given a tremendous breathing space to implement the economic reforms that it has courageously set forth. india's latest cpi data suggests that price pressures in asia's third largest economy could be moderating. and in the u.s. investors will be ringing upresults from a pair of retail heavyweights. kicking off a big week of earnings for the sector.

we will get back to the greek agreement in a few moments. first we have public sector borrowing numbers coming out of the uk. january is a big tax take month so we'll see what we've got. january public sector net minus 7.7 billion. that's bigger than the minus 6.3 billion. the biggest surplus since january 2008. the surplus was 5.2 billion during 2011. the public sector net borrowing 10.7 billion. that's bigger than consensus of 9 billion. it was 7.9 billion in january of last year and the secotor net cash requirement mip us in 16 billion. so the couple umulative april t january public sector net borrowing is 93.45.

april to january is 109 billion the last time around. the cumulative april to january of 2012 public sector net 65.2 billion. and for the april to january period last year it was 88.2 billion. the point is that the public finance surplus is bigger than expected in january for the uk. that's the best way to put it. lauren will join us. your reaction to these numbers. it hits the targets for this financial year. >> well, let's see. the economy is not doing that well so it's not doing that badly either but the track record on hitting the budget targets or the inflation targets for that matter hasn't been that great in the united kingdom. we'll see how things pan out. it depends on how soft the economy proves to be, i think. >> your reaction to the numbers and what it means for obr

forecasts. >> yeah, it is consistent with some of the wetter signs on the economic side that we've seen recently. the retail sales in december and january were surprising on the upside and i think that's part of the same sort of trend. maybe the economy is actually doing a little bit better than what we expected and that will help them meet its target or exceed its target. >> it exceeds its targets, how would the obr respond? >> well, i think there's still a question on the long-term is your surface. it still needs to be maintained and the rating agencies very clearly have continued to press that point. but it is much easier to achieve these fiscal consolidation when there is growth rather than when there is no growth. >> are we going to get more qe

out of bank of england or are we moving away from that? >> i think -- well, we just had another round of qe. >> people are betting this might be the last extension. >> right. i think it all really depends, like he just said, some of the numbers have been better than expected and that's because expectations have been beaten down. i think the bigger picture here is no major country in the western world is out of the woods yet and the outlook is critically dependent on obviously what happens here domestically. also what happens in western europe and in the eurozone in particular. none of that is going to be very good or very supportive. so i would say for the time being, the bank of england is probably on hold as far as another 0 round of qe goes but it's all going to be path dependent and there will be head winds during the course of 2012.

>> let's just recap. let's go back to greece. we've been having a conference from the ifs with charles dallara. we think it's around 73% to 74%. the nominal value was going to be 50%. it suggests it's 73 to 74 and dallara confident of strong participation in the voluntary greek debt deal, the biggest ever greek debt deal. is there going to be strong participation or not in your view? >> it's probably better place for me to actually say that, but the assumption by why are ozone officials and by greek officials is there should be something like 95% participation in the deal which is extremely, extremely high. so i expect to get that you

first need to pass the low introducing retroactive and so that it is there as a meaningful to encourage people to go voluntarily to the exchange. but 95% is very high. >> yeah. let's be clear here. if you have to enact -- if you have to use that law, that collective action law, it's no longer voluntary, right? you've created a credit eye vve >> correct. we're probably past this debate at this point given how difficult it is to find the extra few hundred millions in the greek side and on the eurozone side. i think there is very limited appetite to let some holdouts here. and so if you don't get the participation rate up to the 90%, 95%, you will have to use

the closers and then it was not going to be voluntary but that's said at this point i think, you know, i think the officials are probably ready to take the chance. >> and we're happy that the cds -- if we trigger cds we won't trigger in i problems and that will work out. if i was a hedge fund at the moment i would probably get more money and would want to trigger cds, wouldn't i? get more back in my cds than on this debt agreement. >> yeah, i think the exposures in terms of the cds, of course, is very difficult to know how much is out there although the ebs stress test from last year we're releasing some exposures and it doesn't look like they were very large unexpected that cannot be dealt with. and the total amount that we've seen, of course, in net

exposure, is relatively limited. we don't think there are that many outright exposures that have been written by hedge funds at this point. >> i think there have been some estimates that the net amount in greece is 3.5 billion so perhaps it doesn't make that much difference given that the financial system is still standing and functioning to pay off the cds so, to me, it sort of feels like what they judged was let's go ahead and get this deal done because it's absolutely critical to put greece a little bit off the table for a while and try and restore the functioning of the market by going ahead with the tax, triggering them out. i guess the question is if portugal's term comes, spain's turn comes, italy's turn comes, now the eurozone has set a precedent that the cds will be triggered and presumably will be honored so i guess the good news

is that people are still going to -- are once again going to treat themselves as hedged but the question is what about the exposures if there are going to be more of these sovereign debt problems. any thoughts? >> i think that is a valid comment not only are for the cds but also for the introduction of retractive collection action clauses in a way which is like, you know, forget about what you knew. forget about what you -- the bonds that you were buying because here we are changing the goal post. and i think these are potentially very large impact and very significant impact for the medium term in terms of european bond markets here and it's going to be very difficult to assess how damaging it is or not in the medium term. but i think the reason why they

did it is because greece was in such a situation and they want to make sure that it's a unique case so that it's not going to be replicated in the other countries but it is a risk that is being taken here. there's no doubt about that. >> and of course everybody now holding government debt now knows that they're second in line after the ecb, right? the ecb was not going to be partaking so i guess all the risk debt has to work out what that means. more to come from you. christine? we have some flashes coming up from earnings of alibaba. total paying members were down 5.4% in 2011. net profit for the q4 at 385.95 million yen.

up 372 million renminbi. alibaba saying q4 coming in at 0.77 yen. overall saying the focus on improving membership quality rather than volume so overall pretty good numbers for q-4. of course we have this chinese commerce firm has been in heated negotiations with yahoo! but talks have come to a standstill. both parties apparently failed to agree how best to value alibaba's online retail business, a $17 billion deal swap. joining us to talk everything alibaba is a columnist reuters breaking news who believes, of course, the two parties are bound to live unhappily ever happen. can i just quickly get your brief reaction to those numbers that just came out before we talk about this deal? >> well, the numbers are not very impressive, of course, because alibaba is a company

highly correlated with chinese trade and the small business of china. of could course chinese exporters are not doing well in the house of the small business. alibaba will have to work through next year. it will be a year of transformation for them. we are expecting to see lower growth in profits so a slower growth space is ahead of them. >> so prospects looking softer. what about talks trying to buy back its stake from yahoo! seems like both of them may have hit a wall and it's not going anywhere. what's your sense of progress? >> it looks like revenge to be able to buy the stake back from yahoo! but the problem is two sides need to first win trust back before they go back to the negotiating table. the problem had here one is

valuati valuation. it's very difficult to value a private company that has grown like 30 times in the past seven years and when you don't have trust to win that, it's going to be very difficult to agree on a price. >> also, financing the deal. is that going to be a stumbling block for alibaba as well? >> financing is going to be tricky. the deal is going to be worth about $9 billion so they have lined up $3 billion in financing, but that's mostly going to be used for privatization and they think about some innovative strategy which has taken advantage of some rules to make it a tax free deal but that's problematic as well. first, the iis needs to agree with them and, secondly, since it involves some kind of asset swap, it's difficult. yahoo! may want this asset. yahoo! may want other assets. they may want assets alibaba doesn't have right now.

it's going to be problematic. i think the issue here -- >> go ahead. >> i think the issue here is they are trying to kill too many birds with too many stoeps. there are so many moving parts. it's very complex deal. >> it is a complex deal like you put it, wei. what's the incentive foremost for both of these parties to come sit together and get down serious and say, let's try and hammer out a deal and cut out all the fluff? >> well, the bad thing for both parties they don't want to be stuck in this unhappy marriage forever so it's up to them to co come back to the negotiating tabling. yahoo!'s part on the past has been blamed for not passing the microsoft of good offer so they have to make sure they are not letting a good deal pass. alibaba's side they are very key to be rid of yahoo! so they have to come back with a better offer. >> interesting story. can't wait for it to unfold.

thank you very much for your thoughts today. a columnist for reuters breaking views. the other story focusing, of course, king fisher, india's cash strapped low-cost carrier has seen its shares plummet 20% in early asian trade today. more on troubling dissent live from new delhi. what can you tell us? >> reporter: thanks very much, christine. yes, it has been a troubling last couple of months for kingfisher airlines and things coming fast this weekend when they have to cancel a significant number of flights. in fact, they were summoned by the civil administration agency, the government of india, this morning to give a sense to the government about their flight restoration plan. we understand that what the kingfisher management has told the government in india is that they were hoping to resume no normal flights in the next four or five flights. this is debt burdened at this point in time, that is in it dialogue with lenders. a consortium of lenders. they are hoping to get at least

404 rupees in working capital. accounts have now been frozen by the income tax department of india and that has further crippled their operations and their compaapacity to even pay salaries for the employ xwres, so things are looking very difficult but it's not just kingfisher. the entire aviation sector in the country is bleeding at this point in time. the largest private carrier is saddled with a debt to the tune of about 14,000 rupees. other airlines are also looking to raise funds at this point in time waiting for the government to announce whether they will allow foreign carriers to invest in indian carriers. i had a conversation with a civil aviation minister from the government of india just yesterday and he said that the government was looking at putting that proposal to the cabinet and perhaps we could see some action in the next couple of weeks but at this point in time it's extremely, extremely difficult for the indian aviation sector, specifically for king fisher, which is really

on its last leg. christine? >> thank you very much for that. live from new delhi on kingfisher. watching scandal riddled olympus in the news again. details live from tokyo. >> reporter: thank you, christine. shares and scandal hit olympus rose more than 3% on media reports that the firm will name executive office as the new president. he has worked as head of the mainstream medical commitment business. investors appeared to be taking the move as a step forward in the company's effort to turn its business around. a u.s. shareholder has described olympus' plan to choose a new chairman from major lender banking cooperation as undesirable. josh shores, a principal at southeastern asset management, told the nikkei he does welcome the fact that olympus intends to select a company outsider as its new chairman. his concern, however, is that an

executive draw from major creditor could end up exerting inappropriate influences over the company. southeastern asset management holds about a 5% stake in o olympus. olympus shareholders will vote on candidates for the new board on april 20th. that's all from tokyo. back to you, christine. >> huch. good to see you. ross? the treasury auction, christine, in spain this morning. it's worth pointing out yields have come down. even in portugal which start add rise this morning. yields have come down this morning. they've sold 1.736 billion three-month treasury bills. the maximum yield 0.044%. 764 million of the six-month bills. that yield down. they sold the maximum 2.5 billion target. those yields are quoted as sharply lower versus the previous auction. bid to cover four for the three month and ten for the six month.

pretty good money for the banks as well. we are looking at another pretty meaty ltro auction next week from the ecb. so more money raised by spain today. something like 34% of their total issuance needs this year have already been met. still to come on the program, we keep our eyes on the retail over the u.s. as walmart and home depot kick off a bumper week of earnings. what to expect at 11:20 cet. and fashion week. why the company's ceo is just as excited about growth in flagship markets as she is about those in emerging ones.

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a little more reaction to what's going on with the greece deal announced overnight. euro dollar a little bit firmer this morning. we did hit a two-week high. yen has had multimonth lows against the other crosses. that's near a three-month high. yen/dollar a high.

7 79.80 is where we stand at the moment. sterling/dollar coming in better than expected. steady at 1.5851. gilt yields 2.24%. they have steadily climbed up over the last couple of weeks as there is a suspicion qe won't get extended. yield continue to come down. good t-bill auction from spain. yields down to 5%. and here in italy, look, that's key. portugal bond yields this morning did start rising first thing. take a look at the curb. while they're still up on the 30 and it ten year but the two-year yield has dropped. now 30.45%. whether we shielded portugal from contagion from greece. they started at seven-month highs have been negative. they are slim losses, the gains we had in germany, for example,

which is up some 18% this year. christine? >> here in asia, ross, a little bit of a mix in reaction to the greek deal. people are starting to wonder if this will be a short-term fix and what will happen down the road. the shanghai composite is up 0.8% today. we had some buying momentum coming into this particular market. late session, of course, reversing any negative losses. the hang seng is up as well. elsewhere the nikkei 225 down. no reaction. as soon as it hit 9,400 level this market pulled down. that greek deal failed to pr provide buying momentum. the kospi is flat. the same picture in taiwan. the greek deal gave a lift to metal prices and that helped the sector move heyer. new zealand is up. the sensex in india up 0.8%. watching cpi and wpi figures out today showing prices are

moderating, ross. all right. our market research strategy of global economics. on his way to athens at the moment to partake in a debate. here is the key thing. we still believe -- the economic numbers don't add up. we'll have another restructuring greek debt or something else has to happen. are we going to get to a point where we shield greece from portugal and italy and spain from an investor point of view? >>the heavy lifting will be done by the ecb. the second ltro coming up at the end of the month will provide more liquidity to the banking system, stabilize the liability side and that will help a lot. the greek deal may take greece off the table as a sort of contagion for a little while.

from the financing side and from the debt repayments. but the politics and the economics and the social stresses are going to continue to be there. so that part of it shielding against that part of it, it looks like the main strategy there is liquidity from the ecb. that will probably work for a while as it did in december. so things will probably be okay for several more months or maybe a couple of quarters, something like that. but we have to keep our eyes peeled on the economies in the question of europe because cutting the budget -- it's the right thing to do long run but it has short term consequences that will aggravate the fiscal side, aggravate public debt. we've seen the numbers in every country in the eurozone. >> britain, italy, the netherlands, nine other eu nations cause them to shift focus from budget cuts towards discussion measures to boost growth. germany and france did it not sign that letter. >> yes.

i think all the countries that are most concerned about debt to gdp ratios are more concerned about the politics, the domestic politics are the ones that will be signatories for something like this. a little bit of a discourse, more people are calling for this sort of thing. the key problem here is the domestic politics in the creditor countries particularly germany require this pound of flesh. so i think it's a very tough slog. >> great to have you on today. thank you for joining us. of course we still have another hour to go and that's the time that we bring jackie in. hi, jackie. a very good morning to you. i hope you had a good, long weekend. you'll be pleased to know we it did get a greek deal which has bought us a little bit more time. good morning, ross. good morning, christine. i'm glad to hear about the deal. in fact, we'll talk more about it. we'll bring you the latest live from brussels up next on the

show where those ministers have agreed on a second bailout package for greece, the head of the euro bailout fund saying it's now up to athens to implement the necessary measures so we'll talk about that. stay with us. >> greece will have to forfeit certain prior actions and certain conditions before the end of the month so that the first disabout burstments can be made.

greece gets deal but investors appear underwhelmed after a second deal to reduce debt by 2020. the deal proposes a bigger haircut for private investors. now 0 the head of the iff says the deal is fair for all parties and will help greece get back on its feet. >> greece will have been given a tremendous breathing space to implement the economic reforms that it has courageously set forth. and here in the u.s. inve

investors will be ringing up results from a pair of retail heavyweights today kicking off a big week of earnings for the sector. welcome back. you are watching "worldwide exchange" with christine tan in asia, ross westgate in london, i'm jackie deangelis here in the states. great to have you with us this morning. the u.s. futures as we get poised for trade on wall street. it does look like an up session for the markets if the dow were to open now it would be 49 points higher, just one point away from its dow 13,000 mark. the s&p would be higher by 4.2 and the nasdaq slightly lower by about seven points, ross. >> and meanwhile european stocks, jackie, have been flat it to slight hadly lower post the marathon session we had in the eurozone. xetra dax has gone up a third. ftse mib down a half. it's worth pointing out bond yields have fallen again. ten-year btps yielding 5.35%, about the lowest they've been

for quite some time. and, of course, stocks coming up after hitting seven-month highs last night. now this all follows 13 hours of talks that finally see a 130 billion euro second bailout for greece. policymakers agreed on a deal that suggest private creditors take a bigger nominal haircut of more than 53% from a previous 50% with extended maturities that implies a total net loss to 74% of holdings. the haircut is expect ed to hel greece lower its debt to 120.5% of gdp by 2020. questions still remain over whether greece is truly out of the woods. silvia has been putting in the long, hard yards for us over in brussels and joins us for more. besides that private sector agreement, silvia, just outline as well what's going on with the ecb and the central bank's contribution because there is a contribution but it's still not perfectly easy to explain how it

works but i know you can do it. >> reporter: no, it's very easy. after 14 hours it becomes even easier because it melts down to the few things you can remember. the ecb doesn't take a haircut. we know that. we've talked about that before. the ecb and the national central banks that are in the system, howev however, bought greek bonds and they've made profit on them or are likely to make profit on them is the hope in the future. whatever profits accrue from these greek bond purchases will be passed on through the system from the ecb to the national central bank. that's the normal arrangement and from the national central banks, the more interesting bid, then on back to the greek government to put it into the debt service and into restructuring. the estimate is that could amount to $1.8 billion right now that seems like small change compared to the $130 billion of

the second package and the $110 billion of the first package and more packages we're talking about, but it's still an important contribution. and aside from that, of course, the big question mark over psi. the agreement has been struck and we've had the head of the iff, charles dallara, where he outlined how much of a goodwill effort it was from private investors and also that gives greece the extra maybe not few yards but certainly a few inches to maybe push the restructuring process further. this is what he had to say. embraced by individual investment firms around the world. greece will have been given a tremendous breathing space to implement the economic reforms

it has courageously set forth. >> and thank you so much to silvia. i want to bring in our guest host for the next hour, it's the managing director at formula capital and i want to bring you in and talk greece specifically. when we talk about this deal the markets have been anticipating this for quite some time now, already priced in, some are saying. when you look at debt to gdp numbers, 160 to potentially 121 by 2020. is that really a significant improvement? >> yeah, that's a great improvement, but, jackie, i sort of feel like i'm in the middle of the twilight zone episode. is this 2012 or 2010? i sort of feel the exact same thing happened in 2010 is and we just kicked the can down to now. now we're taking it down to 2020. so who cares? i mean, the reality is, just a history lesson, greece has been supported by its neighbors since 30 bc, since augustus, the

empire, reagan, greece has never supported itself. so we've been anticipating this for 2,000 years. so nothing has changed and nothing will change. it's 3% of the eurozone gdp. it has no affect on the u.s. stock market in the long run. >> and that's really the question when we look at it, when we talk about a dis0 orderly default, that there might be contagion, that it might send the markets reeling. >> the can country has already defaulted. private investors are 70% down permanently. this is worse than a default investment a default you restructure. there's no restructuring. greece has already defaulted. the euro banks have more money in reserves than in the past 15 years so everyone has already anticipated this. the u.s. banks have an extra trillion in reserves than a year ago. this is all anticipated so there's a total buffer zone now. >> and we look at the private default, the private creditors there and the default they are

going to take, the haircut, we were expecting around 70% but it did come in higher than 50%. so is there some upside actually is this. >> there might be. this is more than just a hair t haircut. this is like they cut their body in half. it's worse than a default. >> let's get more on that. charles dallara is managing direct director for international finance. charles, thanks very much, indeed, for joining us. it has been a long night for you. we appreciate you joining us. we just ran a clip from you saying if there's broad agreement from the private sector this will make a major contribution. how much of an if is that? how much support do you generally think this deal is going to get? >> oh, i think it will get very strong support. of course we respect the fact that each individual investors will need to make its own determinations and judgments but this deal holds considerable benefits for investors and i couldn't disagree more with your previous speaker who says greece is in default. the facts are quite the contrary. greece has met every payment

that is due to creditors and now we are voluntarily restructuring a huge amount of the debt, eliminating a substantial amount of the debt to give them the breathing space that they need to successfully implement this program. we're quite hopeful about high levels of participation in this deal. >> reporter: it's silvia from brussels here. we have both had a long night, i guess. in terms of you said you're quite optimistic there l enough of an uptake, how optimistic are you? a lot of that hinges on that. and are you concerned at all by the collective action clause law being put into greek legislation in a sense saying, well, it's not voluntary it will be unvoluntary? how concerned are you that we still might have a cds trigger? >> well, i think you've raised, silvia, a very important with question mark. our focus is on the voluntary dimension of the deal, and we remain quite hopeful this it deal can be successfully

concluded on a voluntary basis. the initiative which is being taken, we understand, by the greek government, is their matter. we have not coordinated with them on this. we view this as a voluntary deal and we feel optimistic that can be done on a voluntary basis. >> it comes back to this. what percentage do you need of uptang to prevent a collective action clause? >> well, i'm not in a position here to put a precise number on it. i think it will be important to mobilize a very high level of participation but, you know, these things have a way of gathering momentum. when the terms of the deal become available and widely understood in the marketplace and when investors get over the initial sticker shock of the net presence loss which is north of 70% and they look at what b benefits are embedded in this

for them, i think this will be quite attractive. there will be a 15 cents of every dollar held of greek government debt by private investors will be paid back to the investors in cash. that is not an insignificant sum given the cloud that hung over greek credit in recent years. the remaining debt will be issued by greeks under english law to be adjudicate d by englih courts and with the esfs to p - provide a high degree of confidence of repayment so there are a number of benefits including a gdp security which gives the investor some upside should greece outperform. this will grab the attention of investors. >> here is the thing. do all those benefits outweigh -- there's a hedge fund -- if i have got cds, if i can trigger collective action clause, i get a cds payment,

they may say i get far more money on my cds payout than on this deal. is that what it's going to come down to? >> well, i think some will look at cds coverage. the oench bulk of investors we've talked to and it's been many, many investors, see there's a broader dimension to this that the benefit of avoiding a disorderly approach here both narrowly and more bro broadly benefits the balance sheets of investors around the world. and the bulk of them realize this, so although i can't rule out the fact that individual investors will look at cds, look at hedges and make their own judgments, i am quite confident that the bulk will find this deal an attractive one. >> charles, where greece is heading from here and whether they will perfeorm and pull themselves out of the quagmire. we started with no haircuts for private investors. 21%. 50% is the line in the sand.

now it's 53%. but if you look at it, it's probably a lot more. is this -- how confident are you this is the final hit that you have to take and there won't be more to follow? >> well, this is the final hit. the deal is coming into the market on friday. deals have been fully negotiated and set now. and it will be put to the investor base exactly as we have negotiated it with the terms and conditions that i have mentioned. and we don't see any scope at all for this to be reopened. greece will need to perfeorm bu i am perhaps among a minority who feel that greece is prepared to deliver. i think they know that with the continued uncertainty surrounding their economy it has not been possible to rebuild any confidence, to rebuild any environment or renewed investment of growth and there's a tremendous yearning for that

increase today. a tremendous yearning. this will be a painful process, but no sovereign country in history has had over 100 billion euros worth of debt lifted off their back in a matter of weeks and that's what's happening to greece now and should give them substantial breathing space and wind at their back to put the e reforms into place and once they begin to get credit going in the economy again, this gives more energy to the reforms and once you see the breaking up of monopolistic structures in the greek economy you will see job opportunities. >> charles, thanks for joining us. my wife says to put ginseng in the tea and that will keep you going. >> thank you. >> thank you very much, indeed. james, charles said he was in the minority. he admitted that when he said we think greece will achieve that. it's interesting because we had this leaked confidential report

out from the troika's own team which the ft got hold of and i have a copy of it here, and they are essentially saying in this that under their more pessimistic scenario the debt ratio would peak in 2015 and falter around 160% by 2020. so that is their own forecast if things don't go as we plan and there must be a risk of that. >> yeah, everything depends on can greece collect taxes? and the reality is they haven't been able to collect taxes for 100 years so nothing will change. but, again, charles is looking at it from the perspective of greece -- >> right. we just had a temporary freeze. just when you get into a good discussion the technicals fail. that was 0 our link is frozen. hopefully it will come back because we need to speak to jackie and james over the course

of the next 40 minutes. we'll talk about walmart and home depot kicking off a bumper week in the u.s. we'll preview that and that will give us a couple of minutes to fix that problem.

welcome back to "worldwide

exchange." it's time for your global markets report. let's start here in the united states, take a look at u.s. futures and see how we're setting up for trade on wall street. looks like a higher open now if the markets were to open it at this point. the dow higher by 40 points. the s&p 500 up by three and change. the nasdaq would be shootly lower after a mixed session. of course, ross, when it comes to trading today, everyone will be looking for dow 13,000 and we're close to that range at this point. >> and those futures are in contract to what we have on european stocks. a session low right now, 8 to 1 decliners outpacing advancers for european markets. remember, of course, after european stocks closed on seven-month highs and very strong gains for the year. the ftse has been an underperformer. right now after being up, what, half a percent yesterday we are today down nearly half a percent. debt dax up nearly 18% for the year before we started today's trade. down half a percent this morning. the cac down half a percent

today, up nearly a percent yesterday. it's been up some 10% for the year. ftse mib is off. euro dollar today, tried to go to the 1.33 level. we were down and did rally initially after the early hours agreement on the greek debt deal. 1.3230 is where we stand. yen is on multiyear lows. euro/yen near a three-month high. dollar/yen up on a six-month high. 79.81 is where we stand. sterling slightly weaker. we did see public financing better than january. a big tax receipt. gilt yields have gone up. in spain and italy down yielding 5.07%. good treasury auction today for spain and ten-year debt now yielding below 5.4%. also still low, though, but

higher than they were just below that 2%. christine, what kind of day have you had in asia? >> well, it was a mixed reaction today. that greek debt deal over in greece, ross, a lot of concerns about whether this will be a short-term fix. markets are looking mixed or finishing mixed. after the news we got some profit taking. the topix is off. shanghai market reversing losses. we had financials leading the way higher. the hang seng with modest gains. the oil majors a softer patch because of high oil prices and how that could be impacting earnings down the road. not much reaction to the greek debt deal. some profit taking going on. same picture on the kospi. flat. that debt greek deal did give the miners a lift because of higher metal prices and this market is up. elsewhere the sensex is up. the story in india is wpi, wholesale prices and cpi data

coming out showing overall price moderation story going on in the indian market. that's it for me today. i'll be back tomorrow with the news making headlines in asia. plenty more to come on the show, though. looking ahead to the u.s. open, so stay with us. ask me. [ male announcer ] if you think even the best bed can only lie there... ask me what it's like when my tempurpedic moves? [ male announcer ] ...talk to someone who owns an adjustable version of the most highly recommended bed in america. ask me about my tempur advanced ergo.

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good morning and welcome back. a big week for u.s. retail earnings with walmart and home depot getting things rolling today. home depot reports results. they are expected to rise more than 2%. walmart reports at 7:00 a.m. expected to post its second straight quarter of same store sale gains as well. now to talk more about rae tail and walmart specifically. you've been watching these earnings. they have recent isly modestly underperformed. what are you expecting out of this report? >> sure. i'm looking for positive same store sales. slightly positive up about 2% on a consolidated basis. looking for walmart u.s. to show about a 1%, maybe better increase in same store sales and

sam's club to show about a 5% increase. so i'm looking for decent sales. they have a very easy comparison. they had an easy comparison that they were up against in the quarter. they were negative last year. same store sales were negative. earnings wise i'm looking for more of a mixed bag. for margin pressure. some of that is broad cost pressures and some of that is price investment that the company has been talking quite a bit about. >> okay. and also in this space we've heard from tjx and those numbers were quite good. compare discounter to discounter what you -- how you see the walmart numbers falling in line with what we saw from tjx. >> well, tjx is will report their results tomorrow morning. they have released sales. they had a great quarter. they come pd up 7% so december was particularly strong, up 8% in the most important month of the quarter. the other big player in the apparel space is ross stores and

they also had about a 7% is increase in same store sales for the quarter. so that space, that off price apparel space is still in a sweet spot with the u.s. consumer. numbers are much stronger there than in the mass merchant space which includes walmart and target which come pd up about 2%. solid but not 7%. >> okay. and talk to me, also, about the dollar stores. we're expecting to see some good results there and likely to see that consumer spending is holding up, obviously, on the low end in that sense. what are the expectations? >> yes, so the first company in the dollar store space to report fourth quarter results will be dollar tree. it's a single price point dollar store concept. they've been doing very, very well. they'll report tomorrow morning and i'm looking for 5% same store sales growth, close to 20% earnings growth so certainly good numbers. the problem is with that one the stock is expensive.

it trades about 19 1/2 times by 2012 etf estimates. trade is at a big premium to to the rest of retail as do the other dollar store stocks and it's not all perfect in the space either. i think we'll see some gross margin pressure across the dollar store space so that's a little bit of a negative, and i think we'll start to see a bigger impact from this price investment that i mentioned earlier by walmart. walmart is starting to regain its bryce perception, perception for having the lowest prices. that was a bit of a problem for walmart about a year ago the dollar stores were gaining an edge. >> it sounds like from what you're describing it's a mixed bag right now when it comes to the retail sector. what are the main drivers going to be going forward as we look at the first six months of this year and stop looking backwards? what do we need to see to see stronger sales, stronger growth,

et cetera? >> sure. it is a bit of a mixed bag. what we'll need to see is a stronger employment market and the numbers that we've -- the recent numbers we've seen with unemployment coming down 250,000 or so jobs is really good news for the u.s. consumer. the consumer is very, very cautious still. and scarred, i think, by the recession and by this ongoing whatever you want to call it in the housing market, disaster is probably a good word. i'm watching gasoline prices creeping up again and they're about close to 40 cents higher than they were a year ago and we haven't gotten into the peak driving season which is september. prices continue to go higher. that could be a negative as we move forward. it's not terrible out there. getting a little bit better. the big thing, of course, is jobs and then i think secondarily i definitely want to see some improvement in housing and maybe we're starting to see

that now. >> yeah, you bring up a lot of good points, patrick. a lot of things to watch out for when we look at the retail sector in general. i agree on the cautious end right now. thank you so much, patrick for that discussion on retail. >> thank you. coming up, a lot more to come on the show. we'll bring you the latest live from brussels where ministers have agreed on a second bailout for greece. imf chief christine lagarde sounding cautiously optimistic. >> with good and solid and rigorous implementation checked on a regular basis by the various partners asosociated wih the program, it can get back on track.

the headlines today from around the globe, greece gets a deal but investors appear underwhelmed after reducing debt to 120% of gdp by 2020. the agreement proposes a bigger haircut for private investors. the head of the if f says it's fair and key for helping greece get back on their feet. >> greece have been given a tremendous breathing space to

implement the economic reforms it has courageously set forth. in the united states dow 13,000 is in sight as investors relieved over the greek debt deal may boost the index above that psychological mark. and u.s. investors will be ringing of results kicking off a big week of earnings from that sector. good morning and welcome back to "worldwide exchange." great to have you with us on the program this morning. let's start by taking a look at the u.s. futures and see how we're shaping up for trade after we got the greek deal here. it looks like the markets will open higher. the dow would be higher by 48 if we opened now, just shy of that 13,000 mark investors are waiting for. the s&p 500 would be up and tech heavy nasdaq would be down. ross, over to you. >> and despite those futures pointing hugher european stocks are underwith whelmed.

you see a half percent. the ftse mib a little bit more. we closed at seven month highs yesterday. the u.s. was closed. the eurozone finance ministers spending a lot of time to finally reach a deal for greece. part of that implies a total net loss between 72% to 74% for p private bondholders. earlier we spoke to the head of the institute for international finance. i asked him whether he thought investors would prefer to trigger a collective action clause and get cds payment rather than accept the deal that was on the table. >> although i can't rule out the fact that individual investors will look at cds, look at hedges and make their own judgments, i am quite confident that the overwhelming bulk of investors will find this deal an attractive one. >> silvia has been pulling an all-nighter in brussels along

with the other policymakers as well. silvia, you have just woken up in the states, people want to know the key elements of this agreement so just rattle through them for us. >> reporter: it was a true marathon and probably lasted longer than the original battle plus the run with the news of the victory. was it a victory? it certainly is a partial victory. i think anything but a deal on the table would have really spooked the markets. the fact that we're not really getting somewhere in europe today, buy on the rumor, sell on the news. we have the 130 billion. that was the number that was on the table. that's being signed off on. we have the psi deal. we've just heard charles dallara with his rather optimistic comments about the 43.5% as being a tremendous effort by the private investors giving greece a little bit of not quite a blank check but a check of who have gone things forward and getting things sorted out. he is optimistic that enough private bondholders will take this up. we don't have a haircut by the

ecb but what we do have is the ecb passing on its profit, potential profits, profits from greek bond purchases. that's normal. but after that, the national central banks can pass it back to the greek government. estimated that 1.8 billion will come out of that. not small change even though in the greater scheme of things it's not the big number. the next thing is the imf is onboard with a substantial contribution as madam lagarde said here this morning at the dawn press conference but how substantial will have to be decided and secondly dependent on what comes out of the next eu summit on the first and second when the exact shape of the esfs will be decided. my guess is they will let these two funds run side-by-side for a while which essentially doubled the firepower for them combined

together. it's like next stop next week, but a little bit of a breather for the markets and for greece and now it's up to greece to deliver. >> all right, silvia. good stuff. thanks for that. talk to you later. jackie? it nothing else, of course the greek agreement has brought us a little more time. what difference does that make to investors with the dow near 13,000 and germany dax up 18% for the year? joining us now to discuss it more is randy warren, are the chief investment officer at warren financial services and still with us is james from formula capital, our guest host for the hour. randy, let me start with you. this is a u.s. strategy discussion. i don't think we could start with the u.s. today and dow 13,000 without talking about the deal in greece. when you look at the deal in greece and we look at our futures, we are pointing up though the european markets are slightly lower at the moment. what does the greek deal say to us domestically? >> what's important for u.s. investors to consider is we need to focus more on what's happening in the united states. as long as greece and europe

doesn't blow up or fall into a disorderly fashion, the united states can really begin to focus more on our own news, on what's happening in the economy and what's happening in earnings reports this year. it's been really good. you can see how the u.s. markets are diverging from the european news as this year has turned into the new calendar. >> absolutely and that has been a trend since the new year. but when we look at the fundamentals we've seen a pretty good earnings picture, i would say. there are still some concerns on the table that we've discussed with the other guests, right, housing is still an issue, unemployment, of course, has come down but still an issue there. gas prices going up. so still some head winds for the u.s. economy here. >> the direction has been gray in every one of those metrics. unemployment has gone from over 10% to 8.3%. housing inventories are at a multiyear low. so the direction is good. everything is in the right positive momentum. >> do you agree with that? >> everyone would be stunned, also, if housing actually made a comeback. no one is expecting that.

if you want jobs in the united states, a good portion of that will come from the housing market. if housing can bottom and start to come up, like the numbers are showing some positive improvement, that would just shock everybody and take the dow way past 13,000. >> let me ask you both this and this is an important question. this is an election year, an important year for the obama administration and the potential incumbents from the republican side as well. the numbers don't always meet the eye in terms of exactly what's happening out there, right. the situation could be far worse than the people who haven't been looking for work, for example. when we look at these numbers, how much are they benchmarks to go by? how much should we take them with a grain of salt? >> there are also numbers we haven't been looking at like private sector employment has fwroen tore 23 straight months in a row so this is, of course, traditionally the biggest area

of employment. so i think the momentum has been utterly positive and not yet reflective in the markets. the s&p trades at 12 times earnings. historically it trades for 15 times earnings. we have 20%, 30% upside or much more this year. >> do you feel 20% or 30%, that's huge. >> i don't know if we'll get it all this year but we'll have that. the european situation has put a lid on the market, the last time i was here was august 9th and was blowing up back then and ever since then it's been a lid on our market and has kept our good news from letting the market go up very much. sure the market is up. it's off a very low level. >> james, in particular, because you're so optimistic, what would make you change your assessment? >> right thousand nothing would make me change my assessment actually. one of the biggest worries, war in iran, europe falling apart

and yet, still, these things will not affect housing starts or the fact that the profits hear are higher than ever. personal expenditures are at the highest point they've ever been. >> yeah, i think the debt contagion issue, it's mostly off the table at this point, so, you know, it seems very bullish for going forward from here looking back, yeah, all you can do is focus on the debt issue. >> all right. thank you so much, guys, for that. we'll have to leave it there. james and randy will both stay with us and give us more insight on the program. is it still to come, the deal is sealed but greece is not out of the woods just yet. we'll get an exclusive view from our next guest. stay with us.

so markets pretty sanguin reaction. a report prepared by the troika before the finance ministers finalized the bailout package warned that athens won't be able to implement reforms fast enough to meet this 120% debt to gdp target by 2012. the ft found various scenarios including a rising borrowing cost which could lead to greece requesting a third bailout. peter is the brussels borrow chief and with me is mark caswell. peter, let's kick off with you first of all.

just remind us what this report says. the debt trajectory extremely sensitive. how bad might it be? >> it's funny. the baseline scenario which is what we base this entire deal on that was reached last night, some of the projections look like this. flat growth this year. does anyone actually believe greece will have flat growth? we've seen early indications of an incredibly shrinking greece economy. that is the kind of scenario they're basing this upon. they say this is a highly risky scenario that has huge down side risk even in a more pessimistic level the growth projections are relatively optimistic. and in that case you get to 160% debt to gdp ratio in 2020 and very small tweaks in growth in changes in the program you start seeing debt levels grow exponentially again. so it is one of these things that very quickly within the next three to six months we

could see these numbers start changing wildly again and renewed once again is there enough money in this bailout to keep greece going for the fo foreseeable future? >> mark, you would suggest no? >> no, not really. because it's not really about is there enough money in this bailout. it's about is it sustainable and is it creatable. you're talking earlier on about, you know, implementation and that's absolutely key and where is the biggest sfumbling block? we have the elections coming up in april. the latest poll shows the party with the most votes is new democracy on a whopping great 19.4%. so we've got no idea what sort of government will come out. if it takes a long time to form a government let alone any resistance that we've already seen and implementation, the likelihood is they will fall behind very, very quickly. >> so this is a time, how much time have we bought? >> not a lot. essentially you have the troika

installed in athens to monitor progress and likely within the next two to three months to say, oh, my goodness, they're falling behind and so it's all back on the table again. >> james? >> this is james from the u.s. my question is greece is supposed to do all of these austerities and at the same time they're supposed to massively grow their economy so they can continue to pay down their debt. how exact ly does that happen i the real world? >> peter? >> that's the interesting thing, frankly, in this report. for the first time really explicitly we're not sure the principals of the bailout support the case. the fact is they say explicitly in the report that once you start imposing austerity measures it gets worse, much worse, before they get better. and it questions the underpinnings of this whole idea of austerity rated growth. it has been the jermans pushing this. once you get, you know, your

debt in order, the markets will have can confidence, investors will flow back in. we've been trying for 18 months. the imf is beginning to say this may not be the right way forward. you see it in spain in particular with spanish numbers are beginning to go haywire. the imf is beginning to question whether another round of us a it territory is the right way to go. you're starting to see that debate for the first time literally in two years begin to happen here in brussels. mario monti in italy has changed the dynamic as well. he has a very strong voice in changing the idea of austerity first so that's a question that a lot of people are asking right now and the imf itself in black and white raises that question at the core of the greek program right now. >> and, peter, let's take that one step further. what happens in a scenario if we do not see greece get its act together and implement the us austerity on a scheduled time line the way it's supposed to? what if there's more chaos in athens? >> i think that is the risk. i'm not sure what you and the other guests -- that me and the

other guests are in that much disagreement here. as you pointed out, it's not like a new democracy. the left party is at 11%. those are the only two in greece that supported the bailout. if they come to parliament with less than 50% you have all these splinter parties. the far left, the economists, they're at 10%, 15%. you literally could have a majority where they didn't support the bailout. social unrest is there. the foe can cuss will quickly become the election campaign in athens and whether there is social unrest on the streets and what do you do then? the question is, you know, how do you -- can you cut greece now and let them go now because, frankly, they have through this bond swap deal as well they have committed now tens of dollars of more euros that they are not going to have to pay out in the foreseeable future regardless of what happens in athens. >> and, mark, the greeks don't want to leave the euro but they don't want the austerity as

well. i don't know who squares that. picking up on the psi, do you think the greek government will have to enforce a collective action clause that actually will trigger cds payouts? >> they're certainly going to be passing a law to force through this. whether it actually triggers or not, i think is pretty much moot. one way or another there's going to be legal cases involved with this. there will be people who resist. say the take-up is 85%. as with argentina where the cases are still going on, there will be a holdout. >> if they enact that law and use it, surely that is a credit event, isn't it? >> it certainly would be, i would imagine there is pressure from the eu to try to avoid that particular situation. nevertheless you are in this situation where actually the biggest problem here is new fiscal compact and this applies across the board. it's a reinforced growth and stability pact. the germans have made it a

stable pact with no growth. >> and there was a lesser signed at the summit to say concentrate on growth not signed by germany and france. the point you were making this morning. good to see you that. peter, thank you. get some sleep if you can. >> i'll try. >> joining us from brussels. still to come on 0 the show, one of our guests is discussing facebook saying that the ip 0 o is going to be a game changer not just for silicon valley. we're going to pick his brain and find out what his next big tech call is straight ahead. [ male announcer ] technology accelerates at a relentless pace. anything not moving forward... is moving backward. [ tires screech ] [ engine turns over, tires squeal ] introducing the 2013 gs, with the lexus enform app suite -- the most connected information and communication technology available in an automobile.

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jobless claims and consumer sentiment. meantime retailers dominate the earnings calendar. in addition to walmart and home depot we hear from kraf it t foods and macy's. dell reports after the close. we'll be watching for that. still with us is randy warren and james to talk about the day ahead on wall street and to talk a little tech as well. james, i want to start with you and talk about the facebook ipo. you are saying this is a huge game change r. tell me why. >> well, imagine if the entire internet were to go public how would you value that? so facebook has become almost this mini internet but organized. you look at the super bowl commercials, almost every ad had the facebook url. i think what you are seeing here is a lot more angel investors because they will get rich off facebook ipo, a lot more startups, venture capitalists funding companies that could get blocked by facebook. you'll see california debt reduced because mark zuckerberg

himself with his capital-gains taxes will pay down california debt. so at every level the facebook ipo will be a good thing pour the ipo season going forward here in the u.s. >> when you look at the revenue model for facebook do you worry about growth in the future? >> i don't because i think they've just started to turn on the spigot in terms of ad dollars. i think we're going to see a lot of offline dollars, that used to go to tv or newspapers, start to go to facebook and we're starting to see that shift and, again, we also have a facebook model that they haven't unleashed. >> and i also want to stay with the tech space but, randy, i want to talk to you about apple as well. james, i know you have a view on this. randy, what's your take? where do we go from here on apple? >> that's an interesting dichotomy. facebook looks really expensive even when it comes out to me it looks expensive but apple looks re really cheap so apple is huge but yet it's really cheap on an earnings perspective. >> i agree with that. >> you like the way apple is growing and the revenue growth

and the earnings growth is everything you want to see in a big cap tech stock. >> and, james, you've always liked apple. >> i think it will be the first trillion dollar in the u.s. the growth is phenomenal. >> we'll be waiting to watch for that. thank you for joining us. james and randy warren. it was a fantastic discussion. that wraps it up for us for "worldwide exchange." in london with you, ross. >> i'm ross westgate. german banking asosociation say it expects many private creditors to participate in the greek deal and banks have taken some haircuts in advance but is it enough? we'll have to wait and see. up next, "squawk box." plenty more reaction on the countdown. whatever happens, we hope you have a profitable day.

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good morning. yes, we have a deal. after months of on and off negotiations, the second greek bailout was clinched earlier this morning. crude reality, iran says it may cut oil. more european kcountries in retaliation for an eu embar dwoe. and target dow 13,000. blue chips shy of the psychologically important mark. the bulls set to make another run at it today. it's tuesday, if february 21st, 2012. i hope you had a great weekend. "squawk box" begins right now. ♪ everybody, everybody, let's get into it ♪ ♪ get stoked, get started ♪ get it started let's get it started ♪ ♪ let's get it started